Analyzing Tesco's Business Environment: A Case Study

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Business and business
environment

TABLE OF CONTENTS
Introduction......................................................................................................................................1
Part 1 (LO1 & LO2)........................................................................................................................2
Different types and purposes of organizations; public, private and voluntary sectors and legal
structures......................................................................................................................................2
Size and scope of a range of different types of organizations.....................................................3
Relationship between different organizational functions and how they link to organizational
objectives and structure...............................................................................................................5
Part 2 (LO3 & LO4)........................................................................................................................8
1. Using PESTLE analysis identify and discuss the various macro environmental factors that
have an impact upon each of the two organizations, highlighting the positive and negative
impacts using specific examples to support your findings..........................................................8
2. Apply a SWOT or TOWS analysis to both organizations to identify their key strengths and
weaknesses. Explain the interrelationships these have with the external factors previously
discussed....................................................................................................................................11
3. Present a critical reflection of key findings and evaluate how they influence the decision-
making process..........................................................................................................................14
Conclusion.....................................................................................................................................15
References......................................................................................................................................16

LIST OF FIGURES
Figure 1: Tesco functional areas......................................................................................................6
Figure 2: Tesco organizational structure.........................................................................................7
Figure 3: Pestle analysis................................................................................................................10

LIST OF TABLES
Table 1: Scope and size of different organization...........................................................................3

Introduction
The business environment is being composed of mainly two words Business as well as
Environment. The business in an economical means human activities such as sales of services or
products, or extraction or purchase or production, which is performed in terms of earning money.
The environment, on the other hand, means all the surrounding aspects. The business
environment is a set of the conditions social, legal, institutional, economic or political whose
control is not there, and it affects organization functions. In the report, Tesco Plc organization
will be chosen the large multinational supermarket chain in all over the UK. Also, the business
environment is being consisted of two main components, such as internal as well as external
environment. The external environment will be discussed in the report by using the Pestle
analysis along with organization SWOT analysis.
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Part 1 (LO1 & LO2)
Different types and purposes of organizations; public, private and voluntary sectors and legal
structures
Public sector: This is run as well as owned by the government for a public. The people in this
sector pay the taxes to a government, and all this money is mainly used to finance most of this
sector. This main sector purpose is to provide adequate services to the public and use the
resources appropriately, which provide benefits to the society. One of the main examples of this
sector is Child support agency, which is a federal agency of government which also oversees a
national program of child support (Salamon and Sokolowski, 2016). They help the children’s in
tribes and states to operate, manage and develop its programs based on federal law by using the
effective tool of child support enforcement.
Private sector: They are run as well as owned by the private people. The main examples of such
sector are sole traders, partnership and franchise. This main sector purpose is to make maximum
profits as well as grow its business more and enhancing the share in the market and also
maximize sales. For example, the Tesco is one of the biggest e private industries in the UK
which offer the competitive package of the benefits and pay for all the jobs either as manager or
assistants in depots and stores. There are also more specialized roles like HR and finance that is
based in the Hertfordshire and its head offices.
Voluntary sector: This sector is not owned by people. Therefore, in this sector, some are
responsible for ensuring that their set targets and budgets are going up to their set criteria or not.
In most of the cases, also they are trying in helping specific kinds of individuals such as Oxfam
or guide the dogs for blind. To survive in this, they should normally have at least one break even.
Cancer Research UK is one of the biggest examples of this sector whose main aim is to minimize
the death number from cancer (Bouckaert et al., 2016). They aware the people who are suffering
from cancer and helps them by providing them appropriate services related to health which
minimize this disease in the UK and it is entirely regulated by the government.
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Size and scope of a range of different types of organizations
Table 1: Scope and size of different organization
Child support agency Tesco Cancer research UK
Scope It is the public sector
organization which is the
executive department
agency for pension and
work that is mainly
responsible for an
administration of the child
maintenance system in
which the non-resident
parents is needed to pay
towards support and
upbringing of its children
(Teubner, 2019).
The Tesco is the biggest
private-sector example,
and the main scope of this
organization is the
fundamental strategy
elements. The
organization scope is
related to the extent of a
market under which they
sell different lines of
services and products.
This is already the big
retailers in the UK as well
as also it is planning, and
also the next target of
Tesco is to get enter into
US market. Already it has
a huge market in Asia and
Europe.
It is the example of the
voluntary sector as the
main scope of this project
is to prevent the people
from cancer. The main
collaboration work scope
includes all the cancer
stages form the prevention
by a treatment which is
living with the palliation
and cancer and end of the
care of their life (Abzug,
2017). The nutrition of this
patient so most important
in management and
preventions of cancer. As it
also includes all sizes and
types of cancer.
Size The parent must seek into
the private agreement.
Numerous factors are there
which affect the child
support agency size when
the NAV is establishing
this. The primary mission
of this agency is to enhance
the child support reliability
and validity that is paid by
It is one of the most
leading brands in a
supermarket chain in the
UK, which is ranking the
highest consistently in the
context of grocery shares
of the market. The Tesco
headquarters is in the
Hertfordshire, and it has
employees as around
It is an organization which
is spending £644m in past
few years that also include
£393m to conduct the
business activities and
research appropriate for the
cancer patient. Also, £30m
is there who is raising the
campaign towards the
cancer awareness research
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their parents when they are
apart from the children.
500,000 of people
worldwide. As it also
operates approximately
7,000 stores all around in
the word (Bromley and
Meyer, 2017). It is
significant in terms of
stores and employees as
well as even in the
consumer base too.
project in the UK.
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Relationship between different organizational functions and how they link to organizational
objectives and structure
There is various structure of the organization, which includes several tasks as this performs the
general activities in which an organization existence comes into the force. The interaction among
authority level and several business activities subordinate the relationship which runs through the
several business organizational levels. There are several functions of the organization of Tesco
that are production, designing, billing, marketing and sales. The business also set up in the
different functions of an organization, but for smooth business, flow is needed to maintain for
appropriate organizational structure. Such an organizational structure that works all around
Tesco organization is as follows:
Divisional structure: The Tesco as has different lines of product in grocery items that operate
particularly in the different division for their different lines of product in which every product
has the separate division like auditing, accounting, finance, sales and marketing (Sullivan and
Skelcher, 2017).The different basis is also there in which the different department is formed such
as project, place, product and functions under which job is performed.
Matrix structure: By using such structure, great working flexibility is thereby business functions
as well as in the huge trivial organization such as Tesco in which work operations and functions
is all around the world as well as also manage them in which common flow is somewhat
difficult. In these kinds of organizational structure, every employee will work under the separate
functions that are based on a different department like designing, marketing etc. This will further
help in achieving the common goals, and resource use are also appropriate because of
decentralized decision making.
Functional structure: Tesco will work on the superior-subordinate management pod
relationship. It also clarifies the jobs and roles of several employees who are working in a
different department, mainly for the separate units. It wills also helps the organization employees
to concentrate mainly on their jobs as well as clear their mind and work responsibility (Kaiser et
al., 2015).
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Figure 1: Tesco functional areas
(Source: www.slideserve.com, 2019)
Impact of the link of an organizational function on objectives
A link between organizational objectives and functions is essential, and it makes an impact on
overall organizational effectiveness because in such purposes it makes an impact on an overall
organization performances as well as organization objectives and goals achievements. The
organization functions are also focusing on achieving the goals and objectives of the
organization which is needed to be achieved through leading an effort in the right manner in
terms of achieving the objectives and goals of the organization (Brunsson and Olsen,
2018).Tesco is a multinational organization that involved different lines of the products that can
achieve the set objectives effectively in terms of minimizing the cost as well as also expand its
services in different countries.
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Figure 2: Tesco organizational structure
(Source: John Dudovskiy, 2016)
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Part 2 (LO3 & LO4)
1. Using PESTLE analysis identify and discuss the various macro environmental factors that
have an impact upon each of the two organizations, highlighting the positive and negative
impacts using specific examples to support your findings.
Political: Tesco is the retailing organization and is operating worldwide; the global political
factors are influencing the Tesco performances greatly. These all factors include the country
stability, legislation act, tax rates in which it operates in. Due to the ongoing stability of finance
in the world, many governments motivate the retailers in terms of creating the job mainly for the
domestic public. The Tesco plays a vital role in creating maximum opportunities for
employment, this turn also the increase in products demands and needs as well as also diversified
their man force (Rahim, 2017).
Economic: Such factors are main concern point for the Tesco because they are likely most to the
prices, profits, demand and leverage costs. However, the organization must be aware of many of
the changes in the procedures and policies like changes in tax rates that can also affect finance
accessibility. Also, this is essential to show that business, although it is internationally growing,
an organization is still dependent quietly on the market of the UK where their shares in the
market are around 30%. Diversification and internationalization are the two main strategies that
are perused by an organization, and it is the main reason for their success. As due to the decline
in the household incomes, and disposable income level, Tesco is mostly shifted of their success
towards promoting its brand value instead of that of luxurious products.
Social: As due to different variety of social changes, the trend will indicate that in the UK, the
consumer is moved towards one-stop shopping and bulk shopping. However, the organization
has enhanced the non-food items number that is offered for the sale or profits. The different
kinds of services and products by the customers are influenced mostly by their attitude and
beliefs that in turn, is influenced through social conditioning. As the consumer is becoming
aware more of the health-related issues, which is due to its approach towards the changing in the
food constantly, and for this, the organization is adopting such changes through accommodating
organic products demands and needs.
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